At 10AM on Wednesday, February 29, 2012 gold and silver were hit with massive paper selling on the COMEX. Gold was hit for about $100 (5.5%) and silver was taken down $3.75 (10%). But the stock market was flat, untouched.
The sell-off in the precious metals was supposedly triggered by Chairman Ben Bernanke’s testimony before the congressional financial committee. Main-stream media reported that many precious metals investors had been buying the metal in expectation of more easy money coming from the Fed soon, but the chairman’s comments on the economy were not quite as dovish. While Bernanke’s remarks did not specifically mention any monetary easing coming any time soon, nothing was said about the $700+ billion of easy money the ECB was providing to European banks.
According to Jim Sinclair, this was a cover-up by the Fed chairman and the precious metals were manipulated to the downside on purpose. Because if the expectation of no more liquidity from the Fed was really the cause of the collapse of precious metal prices, then the stock market should have been hit just as hard, which it was not! Furthermore, this $700+ billion for European banks was QE! The ECB got those funds from two places: “It’s been coming in from the IMF and from swaps done by the US Federal Reserve.” Here’s Jim Sinclair’s audio interview at King World News.
Indeed, here are three articles making the case that the sell-off was initiated by a seller who wasn’t at all interested in profit, but was motivated by taking the market down:
- A Single Seller Drove Gold Down as Bernanke Testified
- Central Banks Smashed Gold
- Gold Fall Creates a Fantastic Opportunity for Potential Buyers
Ironically (or not), the precious metals were hit during this exchange between Ron Paul and Ben Bernanke, where Paul held up a silver ounce coin and asked the chairman why people aren’t given the option of using gold and silver as a “competing currency” with the US dollar.